XRP price has fallen nearly 40% since January 5, dropping from $2.35 to around $1.40. Moves of this size usually trigger panic selling and long-term damage to market structure. But this time, something very different happened.
Instead of accelerating the decline, one holder group stayed calm, while another, less enterprising, group quietly left. At the same time, leverage remained balanced and institutional flows stayed positive. Together, these signals suggest XRP’s crash may have strengthened its foundation rather than broken it.
Speculative Holders Collapsed — Removing the Biggest Source of Selling Pressure
One of the most important changes during XRP’s decline was the exit of speculative holders, as measured by the HODL Waves metric, which segments cohorts by time. These are short-term traders who typically hold for one day to one week and tend to sell quickly during volatility.
On February 8, these short-term holders controlled 2.29% of XRP’s total supply. By February 26, that figure had fallen sharply to just 0.579%. This represents a 74.7% decline in speculative supply share in less than three weeks. All while the price declined.
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This kind of flush is important because speculative holders often create continuous selling pressure during rebounds. Their exit removes an unstable supply, allowing the price to stabilize. In simple terms, weak hands have already left. This reduces the risk of panic-driven crashes during future pullbacks.
But removing weak holders alone does not create strength. The more important question is whether strong holders also stayed.
Long-Term Holders Held Firm, Even as XRP Price Lost 40%
While XRP price collapsed, long-term holders behaved very differently.
The Hodler Net Position Change metric tracks whether investors holding for at least 155 days are buying or selling over a 30-day period. These holders are often considered the most informed participants because they typically accumulate during weak markets.
On January 5, when XRP traded near $2.35, long-term holders had added around 47.3 million XRP on a rolling monthly basis. By February 26, after XRP had dropped to around $1.40 (a 40% dip), their net position change had risen dramatically to approximately 145.45 million XRP, a 200% rise.
This means the largest and most patient holders increased exposure while price collapsed — the exact opposite of panic behavior.
More importantly, since mid-February, their holdings have remained steady even as XRP fluctuated between $1.21 and $1.52. They did not reduce exposure during volatility. This stability sends a strong signal. It suggests that the investors with the highest conviction are not treating the crash as a reason to exit. Instead, they appear to be positioning for future recovery.
This creates a stronger holder base. But price stability also depends heavily on derivatives positioning.
XRP’s Balanced Leverage Weakens The Biggest Crash Risk
One of the main reasons crypto crashes accelerate is excessive leverage imbalance. When too many traders take the same position, forced liquidations amplify price moves.
Ethereum currently shows this risk clearly. On Binance’s ETH/USDT perpetual contracts, long leverage stands near $976 million compared to $576 million in shorts. This creates heavy downside liquidation risk if the price falls.
XRP’s positioning looks very different.
On Binance, XRP’s perpetual contracts show approximately $74.93 million in long leverage and $69.14 million in short leverage. This is almost perfectly balanced, in the same timeframe as ETH.
This balance is important. It means XRP does not have a large cluster of overleveraged buyers that could be wiped out during a drop. At the same time, it also avoids overcrowded short positioning that could destabilize the price.
Balanced leverage creates a healthier structure. It allows price to move based more on real demand instead of forced liquidations. This healthier positioning is also appearing in institutional flows and technical structure.
Institutional Flows and XRP Price Structure Now Open the Path Toward $1.70
While many major crypto assets experienced weak ETF demand in February, XRP-related investment products continued attracting steady inflows. This shows institutional participation did not collapse during XRP’s decline. There were no major net outflow weeks recorded in XRP-linked investment products
Institutional inflows are important because they represent longer-term capital. Unlike speculative traders, institutions do not usually react to short-term volatility. Their steady participation helps stabilize markets during uncertain periods.
Combined with strong holder behavior and balanced leverage, this strengthens XRP’s recovery foundation. These structural improvements are now aligning with a key technical setup.
On the 8-hour chart, XRP appears to be forming a cup-and-handle pattern. This is a bullish continuation structure that often appears before upward breakouts. The handle formed after XRP corrected about 7% from its recent February 25 high, creating a consolidation zone.
This structure now defines the key levels ahead. If XRP holds above $1.38, the bullish structure remains intact. A drop below this level would weaken momentum.
A move below $1.31 would invalidate the bullish pattern completely. On the upside, XRP must first break above $1.42 to confirm the handle breakout. The more important breakout level sits at $1.52, which sits near the neckline of the cup-and-handle pattern.
If XRP breaks above $1.52, the technical projection points toward approximately $1.71 (the $1.70 zone). In stronger breakout scenarios, the move could extend toward $1.86 depending on breakout strength and where the neckline gets breached.
For now, XRP’s crash may have done something unexpected. It may have made the asset structurally stronger rather than weaker.
